Makemytrip (NASDAQ:MMYT) Q2 2027 Earnings Call

0:00 As a reminder, this live event is being recorded by the company and will be made available for replay on our IR website shortly after the conclusion of today's event. At the end of these prepared remarks, we will also be hosting a Q&A session. Furthermore, certain statements made during today's event may be considered forward-looking statements within the meaning of safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, are subject to inherent uncertainties and actual results may differ materially. Any forward-looking information relayed during this event speaks only as of this date and the company undertakes no obligation to update the information to reflect changed circumstances. Additional information concerning these statements is contained in the risk factors and forward-looking statement section of the company's annual report on form 20F filed with the SEC on July 27, 2026. Copies of these filings are available from the SEC or from the company's investor relations department.

0:58 I would like to now turn over the call to Rajesh. Over to you, Rajesh. Thank you, Vipul. Welcome everyone to our second quarter call for fiscal 2027. We are pleased to report strong market leading growth despite a challenging environment for the travel industry particularly in air travel segment. The West Asia conflict and resulting inflationary pressures due to high ETF prices and INR deprecation have weighed on air travel demand both for international and domestic air travel. Our performance in such difficult macro conditions is a testament to our resilient comprehensive product portfolio strategy Both in retail and corporate segments as well as the focus execution by the team. Our strong Q2 performance in a low leisure travel season quarter was led by domestic travel and short haul international destinations for leisure purpose while business travel within India continued as usual resulting in robust growth in our corporate business.

2:00 We were able to capitalize on this shift of choices with our ground transport offerings along with unmatched accommodation options resulting in robust growth in these segments while performing in line with the market on air travel. We continue to deliver growth and profitability While investing in the capabilities that will support our long-term growth, in Q2 we delivered gross bookings of 2.7 billion, witnessing growth of 20.9% year-on-year in constant currency and adjusted operating profit of $46.2 million. All business segments delivered strong growth both in volumes and gross bookings value. except air ticketing where we continue to hold on to our market share in domestic air ticketing and perform better than market in international air ticketing.

2:49 Our non-air business mix has now reached 63.2% compared to 61.5% during the same quarter last year. We believe our resilience is best reflected in our ability to sustain customer engagement, serve evolving travel needs across categories and deliver profitable growth. India's underlying Economic momentum and propensity to travel remains robust. Therefore, our longer-term view of India remains unchanged. The near-term environment calls for careful execution alongside continued investment in the market with substantial long-term potential. An expanding base of aspiring travelers, participation from smaller cities, improving connectivity and digital payments will support growth in travel consumption over time.

3:36 The opportunity includes both increased travel frequency and a greater share of that travel being booked online. Progress will vary by category and market, but the underlying need for convenient, reliable travel services remains strong. This is why we continue to invest beyond the immediate quota. Hotels, alternative accommodations, Buses, intercity cabs, tours and experiences present opportunities where the supply is fragmented and is digitally underpenetrated. In these categories, growth requires us to make supply easier to discover and book, improve confidence in the product and deliver dependable service. Building these capabilities helps expand the online market and strengthens our ability to earn a larger share of it. For hotels, we continue to drive online penetration by going deeper into the country and aggregating fragmented supply.

4:30 Similarly, our intercity cabs business, which we started to build only a couple of years ago, is now growing upwards of 40% year on year, although on a small base. Our objective is to build sustained share gains through a better customer and partner proposition backed by a strong tech platform. Let me now share how we think about AI. We see AI as a net positive for online travel platforms, particularly in large emerging markets such as India. AI can gradually change how customers search and book for travel, but it does not change what it takes to deliver a trip. Accurate and bookable supply, reliable transactions and someone accountable when plans change. We believe value will accrue to platforms that are that own those capabilities and these are the capabilities we have spent building over the last two decades.

5:21 Travel is an involved purchase with an element of inspiration, exploration, emotion and experience and often a significant share of household spread. Customers like to explore multiple options, take time to discuss with families and friends before choosing the reliable option. We expect conversational assistance and visual discovery to work together with customers choosing how much of the journey they want to delegate. The nature of supply in India is central to how we think about this. Much of India's travel supply is fragmented and a meaningful part of it still operates offline. Independent hotels, homestays and villas, thousands of private bus operators and local cab operators. A large part of this supply does not have structured content or reliable digital print of rates and availability.

6:07 A horizontal AI assistant can only recommend what is discoverable, accurate and bookable that is available on internet. And in India, much of that layer does not exist on the open web. It has to be built on the ground, partner by partner. Our domestic accommodation portfolio now covers more than 105,000 options across over 2,000 cities and our bus platform carries more than 50,000 schedules a day. Behind these numbers are years of partner onboarding, content creation, inventory and pricing tools, and quality checks. This is difficult to replicate and AI makes it more valuable, not less. Our second advantage is proprietary data. Over two decades of searches, bookings, cancellations and reviews from customers who have actually traveled give us a grounded understanding of what a property is really like, which room suits a family with elderly parents or which bus operator runs on time.

7:04 Our knowledge graph connects property attributes, reviews, images and location intelligence with customer preferences. General purpose models built on public information do not have this transaction level understanding and it is what makes recommendations relevant. As AI makes information more widely accessible, we expect differentiation to depend increasingly on the relevance of recommendations, the quality of bookable options and the reliability of service. Third is the transaction and the relationship after it. A traveler needs confidence that the price is final, that the payment has gone through whether by UPI card or EMI or with the right GST invoice for a business traveler and that support will be available if plans change.

7:50 When a flight is cancelled, a booking needs to be amended or a property does not meet expectations, the customer needs a clear point of contact. who can rebook, refund and coordinate with supply. Our ability to connect discovery with booking, payments, amendments, refund and assistance at scale and across languages is central to our proposition. This brings me to trust, which we believe will shape how customers adopt AI in travel. General purpose assistance are useful for inspiration and research and some travelers may begin their journeys there. But planning a trip and committing money to it are different decisions. When a customer is spending a meaningful part of their monthly income on a family holiday, they want the answer to come from someone who can see live inventory and actual policies, can complete and change the booking and stands behind the outcome.

8:43 A general assistant can recommend a travel platform is accountable for delivery. We think this distinction matters most at the point of payment and when something goes wrong, it is where a vertical assistant backed by a trusted brand has a natural advantage. In India, this matters even more. Many of the customers coming online are first-time or infrequent travelers from smaller cities. Often more comfortable speaking in Hindi or a regional language than typing in English and highly value-conscious. They often need help understanding an unfamiliar destination or product. A customer planning a pilgrimage with elderly parents may want to explain the budget, accessibility needs and meal preferences in their own language and be confident that what gets booked will match. A travel specialist assistant, backed by brands customers already know such as MakeMyTrip, Goibibo and RedBirds is well placed to earn that confidence. We believe this can help bring assisted and offline travel demand online and help smaller suppliers reach demand they would otherwise find difficult to access.

9:52 These are meaningful opportunities to expand the market. Our early experience supports this view. Building on last quarter's launch of Myra 2.0, we made our AI travel assistant smarter, faster, and more closely integrated into customer journey. Expanding its capabilities across end-to-end trip planning, native voice interactions, and in-chat payments. Myra now engages in over 90,000 daily conversations and assists over 3,000 bookings a day. Customers engaging with Myra convert at around 1.7 times the rate of those who don't. In Tier 2 and Tier 3 cities, which account for around 55% of Myra conversations, this rises to over 2.1 times. These are the customers who benefit from the assistance and these patents reinforce our view that a travel specialist assistant can help more of them book with confidence. Myra also resolved over 53% of post booking queries autonomously in relation to flights and hotels.

10:54 We have also embedded generative AI into our core hotel and flight booking journey, helping customers express their preferences in natural language and discover more relevant options. AI-powered semantic search now accounts for around 10% of total searches with conversion rates approximately 24% higher than filter-led search. Smart filters and Myra recommendations within the booking journey are showing even greater conversion advantages, particularly among new customers. Our approach is to keep strengthening our AI interface Myra while experimenting with external assistance alongside Customer-facing applications, our investment priorities include AI-assisted engineering, partner onboarding, and customer support.

11:39 AI can make the work of aggregating fragmented supply faster and more efficient, for example, in creating content for and onboarding smaller partners, and we see scope to reinvest part of those productivity gains in growth. We will measure success through better customer outcomes, dependable service, and sustainable economics with appropriate oversight where human judgment remains important. To summarize, we are driving three economic outcomes with AI. A, growing revenue and conversion through personalized discovery, semantic search, assisted planning, relevant cross-sell, and better matching of customer intent with available inventory. Improving operating productivity through automation of routine servicing, engineering productivity, supplier content creation and faster partner onboarding Expanding the addressable market by bringing fragmented supply online, enabling customers to translate in regional languages and making complex travel products easier to discover and book Looking ahead, we remain mindful of evolving geopolitical environment and macro situation We will continue to serve customers across their travel needs, strengthen our presence in categories with significant potential for online adoption and invest with discipline in future growth. We believe this approach positions MakeMyTrip well to capture India's long-term travel opportunity and deliver sustainable profitable

13:09 growth. With this, let me now hand over the call to Mohit for business highlights of the quarter. Thanks Rajesh and hello everyone. During the reported quarter, the external environment remained challenging for the Indian travel industry and particularly for our outbound and air ticketing businesses. While making sure that we performed better than industry in the impacted segments, we focused on driving growth momentum in the other segments of travel such as accommodations, ground transport including bus and cabs, as well as a variety of ancillary travel services. As a result, we were able to post gross booking year-on-year constant currency growth of 20.9%. The ability to drive strong operational results even in a seasonally weaker quarter for leisure travel despite the degrowth in air ticketing industry shows the resilience we have built in our overall business and in being able to dial up different lines of businesses and or demand segments largely led by our ability to offer curated travel options that suit the pocket of every Indian traveler.

14:15 In view of high airfares, we dialed up growth across domestic destinations, promoting drive-down breaks, short-duration holidays, pilgrimage-led trips and supported the breadth of our hotel and ground offerings. Our operating focus remained on expanding relevant supply, improving the booking experience and encouraging repeat usage. As we build on this breadth, we are deepening our capabilities within each category to serve more travel locations and across price points. Let me now share some segment-wise commentary, beginning with hotels and packages, which accounts for a leading 40% share of our business mix. During this quarter, this segment delivered an adjusted margin of $116.8 million, representing a strong year-on-year constant currency growth of 20.2%, standalone hotel room 90 degree, 18.6%, driven by a strong growth of 20.4% in domestic hotels.

15:14 It was encouraging that despite the degrowth in outbound travel from India due to a variety of external factors, our international room nights continued to grow amidst single digits year on year. Domestic growth was powered by curating wider supply to drive demand for a variety of travel occasions including short duration, spiritual tourism or celebrations such as anniversaries and family gatherings. International rural demand has also held up across destinations outside the Middle East and long-haul markets where geopolitical headwinds and high fares continue to weigh on travel. Accommodation remains an important investment priority for us. India's supply landscape is fragmented with a wide range of independent hotels, homestays, and villas. For many partners, the opportunity involves getting discovered and bringing more of their business online.

16:08 At the end of the quarter, Our domestic accommodation portfolio covered more than 1,05,000 options across 2,080 cities in the country. Alongside expanding coverage, our priorities include improving content availability and personalization of recommendations so that our customers get the most relevant options to choose from and our supplied partners see improving business from participating on our platforms. While geopolitical headwinds weighed on near-term international demand, we continue to see outbound travel as a significant long-term growth opportunity and therefore continue to invest in building international hotel supply. We are expanding our directly contracted hotel network.

16:52 We have expanded our direct hotel supply by adding 45 new cities during the last one year, taking our total presence to about 110 destinations globally. Overall, the directly contracted international hotel portfolio grew to 40,000 accommodations, a 30% increase over same quarter last year. These investments broaden our offering and strengthen our ability to capture growth as demand recovers. In hotels, we are combining a broader range of accommodation options with technology that helps customers find the right stay for their needs. From family holidays and pilgrimage trips to group travel, events or business-related travel, we continue to expand our supply and product capabilities to serve each of these locations a lot more effectively.

17:42 Our focus extends across customer cohorts and price points, offering relevant choices for different budgets and preferences. We continue to accelerate our efforts to solve for specific needs of the Indian customers as they travel within India and internationally.

17:58 Flexibility with hourly bookings, solving for guaranteed early check-ins, upgrading to better rooms, getting the right meals, group stays or child stay options are some of the examples of areas which we have worked on with deep consumer insights and specific needs. While solving for customer needs on one side, these value propositions also help build incremental revenue for our supply partners. These value propositions were driven largely by rolling out an AI-enabled deep learning system across our apps, combining our proprietary knowledge graph of property attributes, reviews, images, and location intelligence with customer insights on preferences and behavior to deliver more relevant recommendations for our customers.

18:46 This improved visitor conversion by over 2.5% with gains of nearly 6% for super premium stays including villas. The system is now live for all app users and we continue to expand the coverage and refine the model. In homestays, we continue to invest behind building the category. We enhanced our product proposition by introducing locality highlights to help customers better understand a property's surroundings and be able to book with confidence, particularly in destinations like hilly areas where homestays and villas are often spread across offbeat locations. This feature is now live across hill destinations and has delivered over 5% conversion uplift for the relevant properties. During the last quarter, we sold over 29,400 unique properties across 1185 cities. We plan to extend this feature to relevant pilgrimage and leisure destinations as well.

19:45 In tours and attractions, our aim is to serve more of the trip beyond the initial flight or hotel booking. Discovery and booking of these services remains fragmented across most destinations. Making relevant activities available alongside the customer's itinerary can improve convenience and increase engagement during travel. With a view to drive convenience in booking and selection, we introduced the MMT Experience Pass, a flexible bundled offering designed to encourage customers to book multiple activities within a destination with compelling value proposition. Early adoption across Southeast Asian destinations has been encouraging and reinforces the potential of offering these bundled experiences to drive higher customer engagement and gain larger wallet share. A bus ticketing business, where Redbus is a strong market leader with phenomenal top-of-mind recall, continues to deliver strong growth. With delivered volume growth of 24.7% year-on-year, with 29.4% growth in gross bookings and 29% growth in adjusted margin in constant currency terms. We continue to work very closely with our bus operating partners to add more inventory, particularly in overnight or pilgrimage-led routes which are seeing much better offtake in view of the prevailing high airfares.

21:07 Hence, almost half of the growth is led by inventory additions with the rest being market share gains. We continue to be optimistic about this segment in view of the improving highway infrastructure and investments by our supply partners in fleet upgrades. We expect this momentum to continue in the coming quarters in line with the upcoming festive demand alongside a gradual shift towards higher quality buses with enhanced amenities. We continue to enhance customer experience by expanding the coverage of the customer comfort score displaying onboard toilets, emergency

21:42 exits in seat layouts, improving in-app live tracking experience, and enhancing our air assistant tray. Our campaign on ease of travel, particularly for women travelers on buses with inbuilt toilets, gained good traction among women travelers across India. These kinds of product-led initiatives are helping us further strengthen our customer proposition. Coming to the air ticketing business, this has been impacted by macro headwinds. Overall, market supply was constrained and domestic departures witnessed a decline of 7% year-on-year, while international departures witnessed a degrowth of 4% year-on-year. Both high fares and constrained capacity impacted demand leading to an overall decline in flown passengers. In line with our called-out strategy, we continue to maintain a leading 30% plus share of domestic air ticketing market.

22:35 AI remains an important part of our customer proposition and a source of engagement across the travel journey. AI is becoming an important differentiator in our flights business,

22:45 helping us improve both booking as well as service through smart affair discovery, personalized recommendations, integrated trip planning, and proactive disruption management. These capabilities are designed to strengthen the customer experience and improve the economics of the business. We continue to enhance our product proposition and drive cross-sell. During the quarter, we launched an integrated flight plus cab booking experience, connecting customers to 200 plus high-demand destinations across India without airports through a single purchase journey. The feature simplifies end-to-end travel planning and supports cross-category adoption. Rollout is underway with flights and cab combinations being optimized for total travel cost and journey duration.

23:32 Let me now share some details specific to our B2B or corporate business as well as the indirect B2C channels. We continue to sharply target different demand cohorts via our corporate platforms, travel agent networks, and affiliate partnerships

23:48 to extend our reach to a broader customer base. Our corporate travel business continues to perform strongly, tapping into a demand pool that complements B2C travel. This mix adds resilience and helps navigate short-term headwinds more effectively. MyBiz and Quest2Travel, the two platforms that we operate on the corporate side, allow us to serve businesses with different requirements from SMEs to large enterprises. These customers value policy controls, reporting, and support alongside convenience booking. At the end of the quarter, MyBiz served about 84,600 active corporate customers as compared to about 75,500 corporate customers during same quarter last year. And Quest2Travel served 568 large customers compared to about 527 large customers served a year earlier.

24:42 Our travel agent platform MyPartner continues to see growing adoption with more than 26,000 unique agents transacting during the quarter for the first time.

24:53 This was supported by an on-ground engagement at technology-led CRM initiatives. Agents are also booking a broader range of offerings with healthy repeat activity reflecting stronger engagement and further cross-sell potential. Another distribution channel for us is MyAffiliates wherein we power travel for other online platforms like Amazon Pay, PhonePay, etc. While MyAffiliates remain a small part of our overall business, it is helping us acquire new customers. Based on seasonality and shifting Thanks Mohit and hello everyone. Before turning to the financial highlights, I would like to highlight the notional translation impact of the rupee depreciation against the US dollar compared with last year to ensure our numbers are well understood. In Q2, currency depreciated by around

25:58 10% resulting into lower year-on-year growth rates by approximately 10 percentage points in reported currency due to translation itself. Our commentary therefore focuses on constant currency growth to provide a more accurate view of underlying business performance. To start with, gross booking value for the quarter grew 20.9% YOY in constant currency terms with all key segments growing in double digits. The quarter performance was supported by strong growth in hotels and packages, bus ticketing business and other segment, helping us deliver strong operating performance despite macro headwinds. Moving on to our segment results, our air ticketing adjusted margin stood at 108.6 million, registering a YOI growth of 14.3% YOI in constant currency.

26:48 While the overall airline departures and passenger flown volume declined YOI and the fares increased in the range of 25-30% YOI due to macro headwinds, we performed better than the market, maintained our market share and achieved robust

27:03 growth in adjusted margin on the back of strong ancillary attach and better unit economics. For the hotels and packages segment, we recorded strong volume growth of 18.5% YOY with standalone hotels growing faster at 18.6% YOY on the back of strong demand in domestic hotel segment, which grew at over 20% YOY. We benefited from the shift in leisure demand towards domestic travel, including short duration and drive-down holiday and pilgrimage-led travel. Our expanding supply across established and emerging domestic markets allowed us to participate effectively in this shift. International hotels segment growth was muted this quarter due to macro headwinds.

27:52 Hotels and packages gross booking growth was at 19.7% YOY and adjusted margin growth was at 20.2% YOY in constant currency terms coming at 116.8 million. Ground transport continued to grow at strong pace during the quarter. Supply additions, wider route coverage, and the continued development of India's highway infrastructure supported the category's structural growth. Bus ticketing adjusted margin was at 45.1 million for the quarter, registering a strong growth of 29% YOY in constant currency. Our ancillaries business which includes intercity cabs, rail, insurance, forex, tours and activities and other ancillaries and is part of the other segment is scaling up well aided by higher attached rates of ancillary services.

28:44 As a result adjusted margin from other segment came at 24.4 million witnessing a strong growth of 29.8% YOY in constant currency terms. Moving on the expense side, most expenses came in line. Marketing and sales promotion expenses for the quarter was 5.4% of gross booking value compared to 5.2% during the same quarter last year. We continue to invest selectively to support future growth and gain market share, particularly in categories where online penetration remains low. Our investment approach is to balance current performance with the capabilities needed for future growth. Priorities include accommodation, ground transport, emerging categories like tours and activity, customer experience and AI.

29:31 We assess these investments against adoption, repeat behavior, and contribution economics. We are also investing in AI with a clear focus on returns. Early efficiency gains are creating room to fund future growth. Our financial priorities remain to support profitable growth, maintain the flexibility to invest, and allocate capital with discipline. adjusted operating profit for the quarter came in at 46.2 million, witnessing a growth

29:57 of 13.8% YOY in constant currency. Our adjusted operating profit margin was 1.7% of gross bookings this quarter, compared with 1.8% a year ago. This is primarily due to divergence in air ticket revenue. Our air ticket revenue is largely linked to number of tickets booked, while payment gateway charges are linked to the total booking value. With airfares going up by 25-30%, processing each booking became more expensive without a corresponding increase in revenue per ticket. We expect this gap between revenue and processing cost to narrow as fares and volume normalize, supporting a resumption of margin expansion. Adjusted net profit before tax grew by 27% year-on-year to 46.2 million, reflecting our underlying earnings performance.

30:47 Reported profit includes non-cash charge of 29.6 million in notional interest on our zero-coupon convertible bonds and 5.9 million in translation related to foreign currency expense, neither of which represent any cash outflow. We have strong balance sheet and our cash flow generation continues to be robust. We ended the quarter with a cash and cash equivalent balance of $815 million. Apart from a small investment plan increase of our stake in BookMyForex, we deployed $17.2 million in the buyback program during the quarter. The company is preemptively managing dilution through buyback program. Cumulatively, we have now repurchased 2.23 million shares, covering for about 37% of the share capital expected to be issued related to 2028 convertible bonds. On the proposed IPO of our wholly owned subsidiary Make My Trip India Limited, we have made a confidential filing earlier and continue to work with the capital market regulator and stock exchanges to get the due approvals. The timing of the IPO is subject to regulatory approvals and market conditions. With that, I would like to turn the call to Vipul for Q&A.

32:07 Deepak, any participant who wish to ask a question can click on the raise hand button and we will take the questions one by one. The first question is from the line of Sachin Salgaonkar of Bank of America. Sachin, you may please ask your question. Thanks, Vipul. I have three questions. First question, just wanted to get a sense on early indications how the December quarter is turning. DGCA traffic shows traffic is down every month given the supply issues and higher oil price. So as we head into the seasonally stronger quarter, should we expect a softer quarter versus what we have seen historically?

32:46 And a related question is your inducements are increasing. So does that mean marketing spend as a percentage of GOV should be closer to 5.5 or higher than that for this fiscal year? Let me pause here. Hi Sachin, maybe I'll take those. You know, on the growth side, yeah, you know, the growth on the flight side, you know, basically the reports coming from DJCA are a good leading indicator of how kind of travel is behaving. But you would see that over the last so many quarters now, The overall look for the platform for us has been a lot more robust compared to how flight ticketing per se is behaving. Even in this current reported quarter, you would have seen the degrowth in the air industry was larger than the degrowth we saw in the previous quarter. But despite that, the overall Growth that we were able to drive across the businesses was actually slightly higher than even in the previous quarter or Q1. So actually overall growth has actually improved through this quarter despite the setback on the flight ticketing side and that would be our endeavor.

34:01 And like we've been calling out over the last few quarters, we want to kind of build more and more resilience within the business that even if there is a line of business or a segment which is not doing very well, due to macro headwinds we try and kind of you know make that up through the other lines of businesses so that's something that we'll continue to endeavor even in the even in the upcoming quarters on the other item which is regarding the you know the increasing customer acquisition cause like i had called out earlier also uh because

34:34 of you know aid degrowing and uh you know as a result of that the mix is improving and going more and more towards higher margin businesses like accommodation and say for instance ground transport or other other segments which are reported in the in the others kind of a you know segmentation with this improved margin businesses kind of you know increasing increasing share in the mix our ability to spend a little more on customer acquisition is much better and therefore while making sure that on the bottom line we continue to kind of you know remain robust this should be seen in line with the Mix of the business and the improving mix of the business. So if that continues, I don't think we would be, you know, kind of worried about optically the customer acquisition costs looking slightly higher.

35:24 Got it pretty clear Mohit. Second question, your press release does indicate customers are engaging with Myra and now I think 1.7 times more bookings are done versus non-Myra customers. So is this a sign that consumers are comfortable with agentic

35:40 AI? And if that's the case, then do we see a risk that, you know, the top one to five percent of users and given the fact that, you know, from a parity rule point of view, they are there. And we spenders, if they eventually move towards agentic AI platforms, we see a risk of losing revenues. So we'd love to understand, you know, how should we look at the consumer adoption of agentic AI and how big that could be a risk. especially for your top users. I do understand the mass market users may never move to an agentic here. Maybe I can take that Sachin, it's a good question as always. You know, couple of points here, very important to understand. So the matrix that we have shared like 3000 bookings and 1.7x better conversion is when customers are using Myra for assistance. You know, while they are in the consumer journey.

36:36 So, you know, the regular consumer journey, they are already on their flow. And in between, if you have to ask a question, they are invoking Maira. So and you know people who are invoking Myra and asking clarificatory questions end up sort of converting 1.7x more than the others who don't. So this is actually embedded in a way along with the consumer journey. So it's not that you know at this point in time that we see in India that people are immediately starting from Ebenecio going all the way and getting comfortable with the agentic commerce yet. It is more of a use case that is getting early days positive signals that they are quite happy to use agent for assistance as and when they need it. So that is one important point.

37:33 The second is just the overall conversations are growing. Right now, the adoption in India is more on sort of asking the questions around trip planning and doing the search, complex query. and also some you know smaller cities through the voice as well as the vernacular usage the new users who have not necessarily have ever used it are coming through the conversational interface again asking few questions and then trying to sort of go to the funnel and do the booking so I would say I don't think we should jump to conclusion at this point in time in India that they are completely getting comfortable with start to end on agent e-commerce yet, agent e-commerce for travel yet, and therefore time will only tell. And the last point that I will make is, and I think I tried to cover that in the script very, very elaboratively as well, you know, the reasons for that, not necessarily only the mass market, the comment that you made, but also the savvy users that rather than going through the general purpose or a horizontal third-party agent, I think the vertical agent with a trusted brand and the expert with proprietary data over the years would be better placed to service the end-to-end vertical

39:05 assistance, if you will, rather than coming through the third party agent. So that's really our view at this point in time, especially in the emerging markets, because the level of deep content that we have built over a period of time, given the fragmented nature of the supply underneath across the segment, is is very very rich and it's very hard to replicate so in unless a third party agent starts to they look to start building the capabilities where they can go end to end which there is there is ample clarity and that there is no real direction on that front uh i think the vertical uh travel assistance or i don't know about the other category but i would have thought you know sort of first principle even in the other categories might be in a better position to sort of leverage to that shift of trend that as and when that happens.

40:04 Thanks Rajesh very elaborate and my last question is whatever you could share on a potential India IPO anything new and I'm asking it because you know Deepak did mention that the IPO timing is subject of market conditions and SEBI approval but looking at where macro conditions are where oil at $114 plus and overhang on AJTKI globally on the OTAs, softer demand and even, you know, the sentiment across for, you know, stock markets across the world is not as

40:33 great. So is it fair to say that ideally there's no IPO happening for the next six to nine odd months or, you know, we don't know that. Any clarity, any incremental new info would be helpful. Thanks. Yeah, happy to take that, you know, Sachin. in fact uh you know we've always said that you know any capital market activity is always subject to kind of market conditions and i think the best thing that one can do is to kind of you know remain prepared to be able to uh you know utilize a good market opportunity uh from that point of view like we had called out we've already made a confidential filing and one of the reasons for doing a confidential filing was that in troubled markets confidential filing allows you a much larger tenure through which it is you know kind of valid so it's almost valid for like 18 months right now we are at a stage where we are still working with the regulators in terms of responding to their queries and awaiting their approval on the on the confidential filing post which will kind of take the next steps as in when appropriate based on based on how the market kind of you know remains so I think we remain prepared and we kind of dial in as market conditions, you know, suggested to be fit.

41:50 And in that sense, Sachin, actually there is no change fundamentally of the approach. You know, since your question was if there is anything new or changed, it's actually not changed. The change might be market condition, which was always the case. So there is no real change. It's just basically we will stay, as Mohit said, we stay prepared.

42:10 and then keep watching the market condition and then as in when there is an opportunity, we look at it. Got it. Thank you all and all the best. Thank you. Thanks, Prachin. The next question is from the line of Manish Adukia of Goldman Sachs. Manish, you may please ask your question now. Thank you, Vipul. Hi, good evening, team. Thank you for taking my questions. My first question is on the air business. I mean, historically, The way at least I understood the business was that your air revenue growth is more indexed to volume growth and less to GBV growth. But in the recent quarters, it does feel like it's tracking materially higher than the volume growth, at least the adjusted margin number. One, if you can explain why that is the case. And two, in that context, is the right metric to look at for your air business, the IFRS revenue may be more than the adjusted margin.

42:58 If you can just maybe help me understand that, that would be great. So, Manish, you know, as you know, on the air ticketing business, you know, it is more flattish margins than kind of completely variable, like some of the other lines of businesses such as, you know, accommodation, bus ticketing, etc. The margins that we earn are completely variabilized, right? And therefore, any change in the ASPs and immediate impact on the absolute margins earned also. In case of flights, it is more kind of, you know, fixed kind of number than variable but that doesn't mean there is absolutely no variability at all you know particularly when it comes to rear-ended incentives or say any upfront incentives that we have with the airlines some of the segment fees etc there is a little bit of a variability as well so some of the you know the ASP increases do kind of you know help and the other thing to kind of keep in mind is usually you would find that In softer seasonality quarter, the margins tend to be slightly better compared to the seasonally peak quarters. Therefore, again, the margin percentages in this quarter are largely in line with a similar quarter in the previous years as well.

44:13 Largely in line and in tandem, nothing specific or differentiated in particular. Thank you, Mohit. My second question is on the Inducement costs so maybe two parts to the question right so one I mean I understand the mix shift that you called out earlier Mohit towards hotels which is driving overall inducement costs high but if I look at just the inducement costs in the hotel segment alone there also directionally the inducement costs have moved higher one if you can explain what is driving that and second just a hypothetical scenario let's say hypothetically if air demand were to improve next year and the inducement costs in the air business which are today high come down to where it used to be in the past and today let's say you're talking at five and a half percent overall inducement cost at a company level right and let's say that falls to a lower number 5.1 5.2 should directionally all of that flow to the EBIT number what I mean to ask is today you're at 1.7 percent EBIT margin you've been in that range for a while is there a possibility that if demand recovers that inducement cost can suddenly fall and Vipul Garg.

45:44 growing in favor of say the higher margin businesses the you know the optically then you know you'll find the inducement cost as a percentage also kind of you know trending in that direction uh so you're right the other thing that i wanted to clarify was you know it's uh even the 1.7 percent that you look at it uh you know which is reported this quarter and might look that we're kind of largely remaining in that range where we were say last year actually it is it is a bit of an improvement because you know the denominator has undergone a change like Deepak was calling out in his part of the script you know airfares have gone up by almost like 20 by 30 percent that's clearly not in the normal course of business right even if you were to assume that Maybe up to 10% fair increases are normal in line with inflationary conditions. The rest, which is almost at least 15%, is kind of exceptional.

46:38 And considering that here accounts for almost 60% of the gross bookings, that's almost like the denominator has gone up by 9 percentage points. so you know this 1.7 percent but for this in a situation on air pricing

46:51 would have looked much better as a percentage of gross booking so optically as like i always keep calling it out based on market situations you know some numbers like adjusted margin or or say adjusted operating margin as a percentage of gross booking or customer acquisition cost as a percentage of gross booking will kind of move in tandem with market conditions but you are absolutely right that if kind of you know the overall situation on travel was to ease out and the demand was to come back a lot more comprehensively with their kind of also contributing to growth there clearly is an opportunity for for kind of you know getting more efficient on the on the on the customer acquisition side and kind of seeing some more kind of you know improvement on the profitability side as well thank you you can just also address the first part of my question on the hotel segment in particular why the inducement charges have been moving higher So, you know, again, these are all kind of, you know, more last minute attribution and therefore I don't kind of, you know, like commenting on any specific quarter or any specific segment in a quarter because this, like I said, you know, this attribution is more, you know, post-transaction or transaction-led.

47:59 And therefore looking at these over a, you know, normalized period of say about four quarters is a better way to look at it rather than for any specific period. Where I was coming from was, I just wanted to make sure there is no element of competition or competitive pressures in this number. Actually, not really. Not really in this segment at least, for sure, as you would have seen. Because if you really look at it overall, you know, see the travel industry, overall growth has been pretty muted. But even if you look at for most players in this segment, you know, the overall growth numbers have come down. In fact, even at a very, very large base, We've actually been able to deliver almost to our desire of kind of keeping adjusted margin growth in the high teens to 20s. We've almost touched the 20% mark at about 19.9.

48:50 So I think we're not really necessarily seeing any competitive pressures as such. But yes, at a time when there is a little bit of a disruption in the market, We would want to kind of gain as much share of the market as possible in all the relevant segments. Got it. And just last question very quickly from my end and maybe I'll also try to push my luck on this one. Last time on the earnings call in the shareholder letter or filing, you had talked about potential Fungibility of the shares, which obviously a post-India listing discussion. Again, like anything incremental you can share on that aspect in particular that whenever let's say market conditions allow and you do indeed list, do you have any more clarity on what shape and form structure may take so that, you know, the shares over time can become fungible to any color if you can share that?

49:41 Manish, like we had said, when we get into the India IPO, we would want to figure out a path between, say, MakeMyTrip, the Mauritius-listed entity and the potentially India-listed entity to figure out a path for creating fungibility or getting into a singular listing over a period of time. Of course, there have been various exploratory discussions which have been happening with the regulators. and as and when we get there we'll definitely have more to share but we'll be premature for now. I mean I think to begin with we'll wait for you know the regulatory approvals to come in on the confidential filing and then as we kind of you know flip public I'm sure we'll come back with more kind of you know color on these matters. Thank you all the best.

50:26 Thank you. Thank you Manish. The next question is from the line of Parash Jain of HSBC. Parash you may please ask your question now. Thank you for the opportunity. I just wanted to understand the competition dynamics within your different business, particularly in air and hotel, especially on the air side when the volumes are going sideways. And in terms of competition intensity, do you think that access to the capital is a differentiator? or how do you see gaining market share if the market growth remains subdued? Thank you. So, Parash, maybe I can take that. I mean, like I think we've called out through the Through the script and in some of the previous questions, no real change in terms of competitive dynamics or competitive intensity as such. And this I'm talking overall across the business and across lines of businesses as well.

51:32 so no real kind of you know shift or change that kind of you know we've seen through the quarter or over the last few quarters as well so pretty much kind of you know remains as is I think we clearly are kind of you know away from the door from the days of say maybe a decade back when a significant amount of you know private equity play could have kind of you know created a bit of disruption and that too was kind of largely happening because you know online penetration was in a very very kind of you know infancy stage back then today if you look at it across most of the relevant kind of you know travel segments online penetration has already reached a threshold where you know just kind of capital dumping is not going to you know create any sustainable advantage and therefore we do believe that market dynamics or kind of competitive dynamics will largely continue to remain as is and don't necessarily see any significant kind of you know changes on this side they just want your attention from your perspective your focus is more on winning customers on quality service rather than on price. And what I wanted to allude it to is that if capital is a constraint and with your strong balance sheet and access to the capital, is it an opportunity to go for the kill?

52:56 It's always been the former. It's always been the former to kind of, you know, win customers more on why kind of providing more kind of, you know, relevant experiences and through better servicing rather than through pricing per se. And therefore, you know, Capital to that extent has therefore never been a constraint. At times, like I've said, historically, when we were kind of, you know, pushed by competitive dynamics, we haven't hesitated in terms of, you know, leveraging the balance sheet or kind of deploying capital if need be. But those are not really the times currently. And clearly, the approach has been more the former than the later. And if you may just add Parash since you know I think you probably are coming from the fact that you know historically that has been maybe the market condition and all like Mohit said I don't think that really is the market condition but more fundamentally see what is also proven over the years is that you don't typically achieve stickiness with the customers by just going completely deep discounting way right so and time and again, and from platform to platform, from category to category, including ours.

54:13 And therefore, while we obviously stay competitive, there's no question that we will not be competitive. And not only competitive, maybe we will also have the advantage, given our scale and the depth of partnerships with the partners, that we would be in an advantageous position for us to be able to just get the most favor nation. and many more. And because we have that advantage and the fact that we have a large size of customers who have transacted with us, a very high repeat rate, and we continue to keep acquiring new users, I think we are overall in a good position for us to be able to sort of Thank you very much.

55:24 and that is by design our strategy when market improves organically we will get disproportionate share of that. So I think because of overall advantages that we have built over a period of time both on the demand side as well as on the supply side We have been able to sort of, you know, so far continue to sort of grow with new users as well as the repeat rates including getting more wallet share from the Indian travelers and we will continue to keep doing that. and so you know I don't think there is any you know sort of question around whether it is going to be you know the excess capital or lack of it is going to be the real differentiator anymore.

56:12 It is more a question of holistic strategy that we've applied and sort of working out nice. Rajesh, if I can squeeze one last question and that Vipul actually have been over the past few months has been very kind to explain it to me. One of the pushback that we hear from your current investors is that potential listing of India will inherently bring a holding company's discount and I understand that the group has a plan eventually to How are you tackling that when you are interacting with the investors? Hi Parash, I think I just kind of answered that in a previous question posed by Manish if I am right. And maybe therefore in the interest of time we will move on to taking more questions.

57:11 Okay, sure. Thank you. Vivek, Mohit we are out of time so this was the last question and over to you Rajesh for your closing comments. Thank you Vipul and thank you everyone. Thank you everyone for patient listening and like we said that you know we've covered pretty much every aspect of the business very very elaborately in the script so would encourage everyone to sort of Thank you, Rajesh. Thank you everyone for joining. You may now disconnect the call.